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1.bharti Airtel-Full Case

During the COVID-19 pandemic, demand for broadband services surged in India. As of September 2020, Bharti Airtel was the second largest wired broadband provider in India with 2.6 million subscribers, behind BSNL. Airtel saw significant growth over the years to become a key player in digital services and telecom. The pandemic further increased demand for home broadband as many shifted to working and learning from home. While Airtel grew its subscriber base, its average revenue per user was still below desired levels and it aimed to increase ARPU to around 300 rupees to have a sustainable business model.

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Kavipriya M
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104 views2 pages

1.bharti Airtel-Full Case

During the COVID-19 pandemic, demand for broadband services surged in India. As of September 2020, Bharti Airtel was the second largest wired broadband provider in India with 2.6 million subscribers, behind BSNL. Airtel saw significant growth over the years to become a key player in digital services and telecom. The pandemic further increased demand for home broadband as many shifted to working and learning from home. While Airtel grew its subscriber base, its average revenue per user was still below desired levels and it aimed to increase ARPU to around 300 rupees to have a sustainable business model.

Uploaded by

Kavipriya M
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Bharti Airtel`s Broadband Surge during COVID-19

Introduction
As of September 30, 2020, Indian telecom major Bharti Airtel Limited (Airtel) with 2.60 million
subscribers ranked second among the top five wired broadband service providers in India after state-
owned operator Bharat Sanchar Nigam Limited’s (BSNL), which had 7.80 million subscribers. As of
2020, Airtel had a commercial presence in 17 countries across South Asia and Africa and the Channel
Islands. It operated in four strategic business segments – Mobile, Telemedia, Enterprise, and Digital
TV. The company provided mobile services, broadband, Internet Protocol Television (IPTV), and
telephone services, Direct-to-Home (DTH) TV services, enterprise services – including national and
international long distance services to large enterprises and carriers, and tower infrastructure
services...

Background
Airtel, a leading multinational telecommunications company based in New Delhi, India, had operations
in 17 countries across Asia and Africa and the Channel Islands as of January 2021 (See Exhibit I for
the List of Airtel’s Operational Areas). The company was incorporated in 1995 as Bharti Tele-Ventures
Limited and promoted by Bharti Telecom Limited. Between 1995 and 1996, the company launched
mobile services under the brand name ‘Airtel’ in Delhi and Himachal Pradesh. In April 2006, the name
of the company was changed from Bharti Tele-Ventures Limited to Bharti Airtel Limited to reflect the
objective and the nature of its business activities...

rowth Over Years


Over the years, Airtel witnessed significant growth in its business. It was the first company to bring 4G
to India in 2015 and the Internet of Things (IoT) and 5G trials in 2018. In the journey from being a
telecom player to becoming a key part of industry disruption, Airtel worked to rebuild the ecosystem
of digital services in the country and drive its growth...

Demand for Broadband Services


Earlier, internet penetration in India was led by mobile phones due to the increasing availability of
smartphones and high-speed connectivity at affordable prices. As of March 2020, India had 17 million
home fixed line broadband users and 19 million fixed line broadband users (enterprises and offices).
By then, about 640 million mobile broadband users were accessing internet services through 4G
smartphones / dongles and other such devices...

The Road Ahead


While Airtel made significant improvements in the number of active subscribers, its ARPU was still
below the desired levels, analysts said. Airtel's Chairman Sunil Bharti Mittal (Mittal) said the
company’s monthly ARPU needed to go up to make it healthy and sustainable. “We believe that an
ARPU of ₹154 is inadequate to turn a reasonable Return on Capital as a company and remain hopeful
that ARPUs will get to ₹200 in the short term and eventually to ₹300 which is where it should be for a
business like ours. Of course, even at this level of ARPU we believe we will be very well placed to
serve all the lower end customers who may have the capacity to pay ₹100 or less,”..
Exhibits
Exhibit I: The List of Airtel’s Operational Areas (As of January 2021)
Exhibit II: Bharati Airtel India Mobile Business
Exhibit III: Indian Telecom Sector (As of June 2020)
Exhibit IV: Bharti Airtel’s ARPU and Wireless Data Traffic (FY 2020 and 2021)
Exhibit V: Airtel’s Strategic Acquisition in India (2012-2017)

Exhibit VI: Top Five Wired Broadband Service Providers (As of May 31, 2020)
Exhibit VII: Increase in Broadband Search during COVID-19 (January-June, 2020)
Exhibit VIII: Airtel Xstream Revamped Broadband Plans

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